Booting up Worcester's startup common

When computers are off, you need to boot them up with a burst of electricity. And the same can be said for Worcester's moribund startup common.

But what would it take to get it going? My best guess is to convince a world-class entrepreneur to start a high-tech company in Worcester.

What does such an entrepreneur look like? One was in the news just a few weeks ago. After all, on Feb. 5 word went out that Worcester-born-and-educated Andy Ory had just sold his company, Bedford-based Acme Packet — it makes hardware that delivers voice and data over the Internet — to Oracle for $1.7 billion. That's a big price, but 65 percent below its April 2011 peak value of $5.7 billion.

Mr. Ory is no ordinary entrepreneur. He is just the kind of person that Worcester needs to attract and motivate to build companies in the city. After all, his Acme Packet's products are used by 89 of the world's top 100 communications companies. And it employs 761 people.

Mr. Ory is a serial entrepreneur. Before he founded Acme Packet in 2000 and took it public in 2006, he started Priority Call Management, which produced equipment that let telecom companies offer prepaid calling, enhanced messaging and one-number services. He sold that one for $160 million in 1999.

Mr. Ory cared about keeping Acme Packet in New England — just not in Worcester. As he told Xconomy in a June 2011 interview, “I do think Massachusetts needs some great businesses. That's where the spinouts occur. When we lost three of the top 10 computer companies — Data General, Digital Equipment Corporation and Wang — that really hurt. That was painful. I'm cognizant of the fact that we exist because of them. We stand on their shoulders. And there is an obligation for us to give back to the community so there are businesses that stand on our shoulders.”

Why didn't Mr.Ory locate his companies in his hometown? It could be because the companies he worked for before going out on his own were located in Cambridge. And the engineers he wanted to hire saw Bedford as a very convenient location for commuting.

But if Worcester wants to create a startup common, the most important thing it can do is to attract entrepreneurs like Mr. Ory, or create an environment that attracts the ones who are born or educated in Worcester to stay in the city.

Kevin O'Sullivan of Massachusetts Biotech Initiative is optimistic about Worcester. As he said on Feb. 11, “Nashua and Manchester are surely nice places to live and work, but I will take the advantages of the burgeoning biomedical corridor between Cambridge and Worcester any day!”

Mr. O'Sullivan is a believer in the corridor concept.

He explained, “As an economic strategy, my sense is that we need to think globally and promote this corridor concept and stop getting hung up on Worcester versus 495, or Lexington versus Cambridge. Here in Massachusetts we are all in this together, as the economy is a completely changed paradigm, and thus each of us needs to bring a strength to the greater good in helping to create new companies, jobs and tax base.”

And he sees Worcester as a city in transition that is heading in the right direction.

He argued, “As a second-tier city, Worcester is a national model in transitioning their economy over the last 25 years from manufacturing (which has gone south and overseas) to life sciences, education and health care-related. Thus, with the right political, business, academic and science leadership in place, the city should continue to hold its own.”

I have conducted over 30 interviews with entrepreneurs and venture capitalists around the world about what it takes to create a startup common. My conclusion is that Worcester needs to identify a talented high-tech entrepreneur who is willing to start a company here. And then Worcester must make an investment in creating the conditions that will cause that entrepreneur to conclude that Worcester — rather than Nashua, Manchester, Bedford, Southboro, Waltham, Westboro and all the other towns where local startup CEOs chose to locate — is the right place to be.

I do not have the answer for how to create the right conditions. But given the number of WPI-educated entrepreneurs who have started successful businesses outside of Worcester, I would guess that there are enough potential entrepreneurs who could start companies here after graduation.

But Worcester will not win the competition for startups unless it views itself as one of many choices of where to locate a startup. This means that Worcester must see itself — not through its own rose-colored glasses — but through the lens of an entrepreneur who is deciding whether to locate in Worcester versus, say, Waltham, based on factors such as the relative ease of recruiting top technology talent and raising venture capital in each location.

It may be “a completely changed paradigm,” but talented people still like to work at a company that gives people like them the quickest possible commute.

If Worcester can make the most compelling case to WPI-educated startup CEOs, they will locate in Worcester and help the city build a startup common that will endure.

Peter Cohan of Marlboro heads a management consulting and venture capital firm, teaches business strategy, and is the author of 11 books – most recently, “Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision.” His column runs Sundays and Wednesdays on telegram.com. His email address is peter@petercohan.com.